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SEC v. Nortek, Inc.

 
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Nortek, Inc.
:
SEC Civil
:
June 7, 2016
:
SEC v. Nortek, Inc.
:
SEC v. Nortek, Inc. (2016).
:
The DOJ separately declined to charge Nortek under the FCPA Pilot Program due to the company’s self-disclosure, cooperation, and remediation.
:
Computer & Information Technologies-Hardware
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China
:
2009; 2010; 2011; 2012; 2013; 2014
:
Unnamed Chinese foreign officials.
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Nortek, Inc. is a Delaware corporation headquartered in Providence, Rhode Island, which manufactures residential and commercial solutions for heating & air conditioning, security, and audio/visual systems. Nortek’s stock is registered with the NASDAQ Global Select Market.

According to the SEC, from at least 2009 to 2014, Nortek’s Chinese subsidiary, Linear Electronics, regularly made improper payments to Chinese officials in exchange for preferential treatment, relaxed regulatory oversight, and reduced customs duties, taxes, and fees. The improper payments were allegedly in the form of cash, gifts, travel, accommodations, and entertainment. The SEC claims that the payments were systematic, occurring at least once a month for 5 years and totaling approximately $290,000.

On June 7, 2016, the SEC announced that it had entered into a NPA with Nortek after asserting that Linear’s conduct violated the book-and-records and internal controls provisions of the FCPA. As part of the NPA, Nortek agreed to pay a total sanction of $322,058. The DOJ later publically announced that it would decline to prosecute Nortek in accordance with the FCPA Pilot Program announced in April 2016 due to the company’s voluntary disclosure, cooperation, and remediation.
:
Books and records (Issuer), Internal controls (Issuer)
:
Non-prosecution Agreement
:
$291,403 in disgorgement plus pre-judgment interest of $30,655.
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322,058
:
0
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Issuer
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U.S.
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United States
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Other Business Advantage
:
Not stated.
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Cash, Entertainment, Gifts, Travel
:
Not stated.
:
No
:
Yes